SMITH (INSPECTOR OF TAXES) Vs. ABBOTT SAME V/S. HOLT SAME V/S. SCOVELL SAME V/S. SHUTTLEWORTH SAME V/S. WOODHOUSE.

JUDGEMENT

(1.) The taxpayers involved in these appeals are journalists employed by Associated Newspapers Ltd. Four of them work for the Daily Mail. They are Mr. P. J. Abbott, a news layout journalist; Mr. K. P. Holt a staff photographer; Mr. B. S. Scovell, a sports reporter specialising in cricket and football, and Mr. T. R. Shuttleworth, who was at first a news sub -editor and subsequently in assistant chief sub -editor. The fifth tax -payer is Mr. Gary Woodhouse, who is the picture editor of The Mail Sunday.

(2.) In each of the years of assessment under appeal each of them received from Associated Newspapers Ltd. an allowance in reimbursement of the cost of newspapers and periodicals which he bought. It is common ground between the parties in each case (i) that the amount of the allowance was correctly included in the taxpayers assessment under Schedule E as an assessable emolument, and (ii) that he had spent on newspapers and periodicals an amount at least equal to the amount of the allowance. The issue in each case was whether the amount thus spent by the taxpayer and reimbursed by Associated Newspapers Ltd. was deductible in computing his taxable emoluments under section 189 (1) of the Income and Corporation Taxes Act 1970.

(3.) The five taxpayers appealed to the General Commissioners for the City of London against the refusal of the revenue, in the person of Mr. R. W. Smith, inspector of taxes, to allow the deduction of these expenses. Their appeals were heard together on five days in June 1989, during which all of them gave evidence, as did Mr. G. P. Burden, the deputy managing director of the Daily Mail. On 1 December 1989 the commissioners gave their decision, which was in favour of the taxpayer in all five cases. On 18 October 1991 Warner J. [1992] 1 W. L. R. 201 allowed the appeal of the Crown against that decision in the case of Mr. Abbott, but dismissed it in the four other cases. Section 189 (1) of the Income and Corporation Taxes Act 1970 reenacted a provision which was first introduced in substantially the same terms by section 51 of the Income Tax Act 1952. It has itself now been re -enacted by section 198 (1) of the Income and Corporation Taxes Act 1988. It reads :